ASCA report highlights evolving role of custodians
11 February 2020 Sydney
Image: Shutterstock
Over the last ten years to June 2019, domestic assets under custody for Australian investors grew by 104 percent, while international assets grew by 185 percent in the same period, according to a whitepaper from the Australian Custodial Services Association (ACSA).
The whitepaper describes the evolving role custodians play in Australia’s institutional investment landscape.
The paper highlighted the demand for custodial services as it continues to grow based on institutional investor demands for support in implementing sophisticated investment strategies, timely and complete information, greater efficiency and risk mitigation as well as a backdrop of continual regulatory change.
It also suggested that data provisioning has also emerged as a key service in support of client’s needs for insight and efficiency.
The report revealed that as of June 2019, the industry held AUD 3.73 trillion in assets under custody for Australian institutions, up from AUD 285 billion in 1996.
In addition, it found in 2019 of total assets, AUD 1.04 trillion 28 percent was invested offshore, compared to the AUD 43.6 billion in 1996.
Custodians also facilitate access for overseas investors into Australia’s capital markets. As at June 2019, $1.66 trillion in Australian assets under custody was held for foreign clients by ACSA’s sub-custodian members.
The whitepaper explained that the ongoing investment by custodians in market infrastructure and maintaining expertise in asset servicing, investment administration and data provisioning is significant.
It stated: “The current ASX CHESS Replacement Project is an example of how custodians are engaged in consultation, advocacy for positive change, technology build and workflow redesign in the interests of overall market efficiency and robust change management.”
ACSA CEO, Robert Brown said: “Custodians are continuously evolving through their focus on operational efficiency and in support of the growth and sophistication of key client sectors.”
He added: “Supporting the efficient implementation of regulatory change, client access to new markets and ways of investing, plus keeping up with necessary market infrastructure like the ASX CHESS Replacement make for a dynamic landscape.”
The whitepaper describes the evolving role custodians play in Australia’s institutional investment landscape.
The paper highlighted the demand for custodial services as it continues to grow based on institutional investor demands for support in implementing sophisticated investment strategies, timely and complete information, greater efficiency and risk mitigation as well as a backdrop of continual regulatory change.
It also suggested that data provisioning has also emerged as a key service in support of client’s needs for insight and efficiency.
The report revealed that as of June 2019, the industry held AUD 3.73 trillion in assets under custody for Australian institutions, up from AUD 285 billion in 1996.
In addition, it found in 2019 of total assets, AUD 1.04 trillion 28 percent was invested offshore, compared to the AUD 43.6 billion in 1996.
Custodians also facilitate access for overseas investors into Australia’s capital markets. As at June 2019, $1.66 trillion in Australian assets under custody was held for foreign clients by ACSA’s sub-custodian members.
The whitepaper explained that the ongoing investment by custodians in market infrastructure and maintaining expertise in asset servicing, investment administration and data provisioning is significant.
It stated: “The current ASX CHESS Replacement Project is an example of how custodians are engaged in consultation, advocacy for positive change, technology build and workflow redesign in the interests of overall market efficiency and robust change management.”
ACSA CEO, Robert Brown said: “Custodians are continuously evolving through their focus on operational efficiency and in support of the growth and sophistication of key client sectors.”
He added: “Supporting the efficient implementation of regulatory change, client access to new markets and ways of investing, plus keeping up with necessary market infrastructure like the ASX CHESS Replacement make for a dynamic landscape.”
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